Global Gaming Has a New Frontier

WHY YOU SHOULD CARE

Because China has more mobile gamers than the U.S. has people.

February 12, 2016

Tap Titans seems like a monotonously simple mobile game: tap the screen to kill monsters, collect gold and recruit allies to help you kill, well, more monsters. As Everett Wallace mashes away at his smartphone, thumbs tapping with the intensity of Bruce Lee in Fists of Fury, he explains the mindless, addictive qualities that have helped this game reach millions of downloads in the United States. This version, though, has a few notable differences — a button that lets you gamble real money to win fake gold, and an in-game store that lets you buy virtual weapons for cash. Oh, and the game’s text is in Chinese.

Wallace, the head of publishing at Boston-based Oniix Mobile, and business head Mario Alvarez are part of a growing group catering to video game publishers — both big and small, of the app and console varieties — trying to take their products global with localized versions. At stake is an emerging Chinese audience of 366 million mobile gamers, more than the entire population of the U.S. And as American sales stagnate in a saturated domestic market, Brazil, Japan and even the Middle East are seen as new gaming horizons. In April, research firm Newzoo predicted that China would jump past the U.S. as the biggest revenue contributor to gaming’s $91.5 billion global market. Meanwhile, more money is moving eastward, and Common Sense Advisory research group said app-localization services would reach $270 million, while game localization would hit $362 million in 2015. American companies, some say, can’t afford not to look abroad: “They have to,” says Rebecca Ray, a CSA senior analyst.

China, which lifted its decadelong ban on consoles in July, represents a uniquely challenging market.

Large-scale adaptation is nothing new, but it previously consisted primarily of Japanese companies like Sony or Nintendo sending their products stateside. Only in the past decade have Western studios dedicated resources to reaching new international markets. Negotiating a market like the Silk Road, though, is fraught with perils, as developers have discovered. FarmVille maker Zynga opened a studio in Beijing, only to close it and let go of 71 staffers in February 2015. The company pointed us to an earnings call from 2014, when it said it would save $7 million annually and “make the tough calls when necessary.” Finland-based Supercell’s Clash of Clans reportedly lost money over a technical error, missing out on profits from many new gamers (the company didn’t respond to OZY’s requests for comment). Localization companies also have favored a boom-or-bust approach that sent as many as 50 games to China each year, yet resulted in few booms and many angry investors. More cautious companies such as Oniix have retooled, focusing on quality instead of quantity. And translation isn’t enough: Cultural norms, spending habits and distribution patterns are key elements to consider, experts say.

Mature-rated games of the blood-and-sex variety, for example, face conservative content laws in countries like Germany, Australia and China. “We have gay romances, nudity, very strong violence, we have throat-slitting and beheading,” boasts EA Games’ Jenny McKearney, a localization expert for its BioWare division. Witty wordplay doesn’t easily translate abroad, and even innocuous-sounding names can cause trouble. BioWare’s Dragon Age: Inquisition featured a young, elegant sorceress named Odette. The French didn’t like the name because it sounded old — like Gertrude or Myrtle, McKearney says. “For our Spanish friends,” she adds, “Odette with an ‘a’ means go eff yourself.” (Odette became Vivienne.)

Major console companies now develop their games for the “Big Six” overseas audiences: France, Italy, Germany, Spain, Poland and Russia. But China, which lifted its decadelong ban on consoles in July, represents a uniquely challenging market. Android users make up 60 percent of the Chinese mobile space, and there are dozens of Android download stores. New games can get lost in the shuffle without the right partnerships. Oniix has opened a Shanghai office, where it builds advertising deals with companies like Tencent, an Asian gaming giant. Games for Apple iOS, preferred by Western game-developers for ease of use, don’t have the same foothold yet.

But for all its complexities, China could prove a bonanza. Chinese gamers, unlike Westerners, are willing to pay again and again for mobile games. Many users have smartphones but not laptops or PCs, says Maggie Nazarenus, Oniix’s marketing director. “People are just more comfortable spending on their phones.” Hence Oniix’s decision to add micropurchases to the Chinese version of Tap Titans, which have added up: The free-to-download game grosses $1 million per month globally with just over 6 million downloads to date in China.

For big game publishers, the bottom line is getting enough return on investment. In Bioware’s case, the magic number is three times the cost of localizing a game, which ranges from $200,000 to $600,000 for simple subtitle translations, and up to $1 million for an extensive voice-over, McKearney says. With 30 percent of its sales coming from localized copies, EA Games now hopes to expand its overseas foothold by taking risks in places like China and Brazil. And companies are counting on that percentage growing. “You build that appetite,” McKearney says.

*This article has been updated to clarify Tap Titans’ global gross and downloads within China.